Which of the Following Investment Strategies Involves Generating a Higher

question 64

Multiple Choice

Which of the following investment strategies involves generating a higher expected rate of return through increasing risk?

• A) Diversifying
• B) Hedging risk
• C) Leverage
• D) Value at risk

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Definitions:

Premium

The amount paid for an insurance policy, or the cost to acquire an option or financial instrument.

Declaratory Judgment

A court decision that resolves legal uncertainty for the parties involved, without requiring enforcement.

Liability Claim

A demand for compensation or remuneration made against an individual or entity responsible for causing harm or loss.

Insurance Policy

A contract between an insurer and insured, detailing the terms under which the insurer agrees to cover losses or provide benefits.